Mazagon Dock IPO sails through on Day 1, sees robust demand from retail investors

Mazagon Dock Shipbuilders has fixed price band for the issue at 135-145 per share. The issue will close for subscription on October 1.

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Shares of the company are proposed to be listed on BSE and NSE.
NEW DELHI: The initial public offering (IPO) by Mazagon Dock Shipbuilders (MDSL) got subscribed 2.09 times on the first day of the bidding process. The public offer received bids for 6,39,74,227 shares till 5 pm (IST) against 3,05,99,017 shares offered by the company.

The retail portion was subscribed 5.64 times while that reserved for non-institutional investors witnessed nearly 78 per cent subscription.

Mazagon Dock Shipbuilders has fixed price band for the issue at 135-145 per share. The issue will close for subscription on October 1. The offer is expected to raise about Rs 444 crore at the upper end of the price band and at the lower range about Rs 413 crore.


Shares of the company are proposed to be listed on BSE and NSE.

The company, incorporated in 1934, is a 'Mini-ratna-I' public sector undertaking under the Department of Defence Productio (MoD). Headquartered in Mumbai, the core capabilities include construction and repair of warships, submarines for Indian Navy and other vessels for commercial clients.

With a capacity of 40,000 Dead Weight Tonnage (DWT), MDSL is India’s only shipyard to have built destroyers and conventional submarines for the Indian Navy and is also the first shipyard to manufacture Corvettes (Veer and Khukri Class) in India.
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Amarjeet Maurya, AVP-Midcaps, Angel Broking said, “In terms of valuations, the pre-issue P/E works out to 6.1 times FY20 earnings (at the upper end of the issue price band), which is lower against ist peers like Garden Reach Shipbuilders and Cochin Shipyard. Further, MDSL has a healthy ROE of around 16 per cent coupled with highest dividend yield and higher cash on balance sheet among its peers. Hence, considering these factors, we recommend ‘Subscribe’ to the issue with a long-term horizon.”

Brokerage Geojit Financial Services has also given ‘Subscribe’ rating to the issue.

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